Tue, September 29, 2026 | 9:50PM ET

Crypto Breadth Is Getting Hot as On-chain Activity Inflects Higher, Rate Volatility Remains the Tactical Hurdle

Sean Farrell ^AC

Head of Digital Asset Strategy

Crypto Breadth Is Getting Hot as On-chain Activity Inflects Higher, Rate Volatility Remains the Tactical Hurdle

I continue to think durable cycle lows are in. As discussed on today’s monthly crypto webinar, my view has turned meaningfully more constructive over the past couple of months, and I think it is right to look for opportunities to get long. That said, the tactical tension we have discussed over the past couple of weeks remains unresolved.
Rate volatility and the long end remain the main hurdles. MOVE continues to rise, the long-end remains under pressure, and the improvement in crude has been concentrated in the front month, while longer-dated contracts continue to move higher. Fed funds futures are also pricing roughly four hikes. I think that is probably close to as hawkish as pricing gets from here, and in a fiscally dominant regime, I think some of the negative effects of prospective hikes are blunted. My bias remains that at least some of those hikes eventually get priced back out and that rate volatility is resolved without anything “breaking.”
Crypto breadth is now stretched in both USD and BTC terms. Nearly 80% of tracked tokens are above their USD-denominated 200D MA, approaching the >80% zone that has often coincided with consolidation. BTC-denominated breadth is also now above the ~50% threshold that has historically looked overheated. Neither necessarily implies a top, and breadth can remain elevated for an extended period of time, but this is a data point worth respecting. What it means is that we need to see the majors catch a bid sooner rather than later.

A rollover in rate volatility could provide that catalyst. BTC and MOVE have generally been negatively correlated, and prior tactical peaks in MOVE have often created attractive opportunities to add crypto exposure. My bias remains that rate volatility begins to roll over in the near-term. If that happens, I think it could help BTC reassert leadership and give the broader crypto complex another leg higher.

Client sentiment has moved decisively bullish. In today’s monthly survey, outright bears had largely disappeared from the 1-3 month outlook, while respondents reported their highest overweight positioning and smallest cash allocation since we began polling in March. There is certainly some selection bias here, but it is still a useful indication of how far sentiment has moved in a short period of time.

Encouragingly, on-chain activity is beginning to turn higher as well. Aggregate DEX spot volumes have started to inflect, with Robinhood Chain contributing meaningfully to the recent improvement. I think that should be constructive for DEX-related names and, downstream, for the broader on-chain credit cycle.

There are early signs that the credit cycle is improving. The 90D change in lending net interest income (trailing 30-day) has moved back into positive territory for the first time since October of last year. We have not yet seen the same pickup in stablecoin borrowing rates, while the spread between median stablecoin borrow rates and 3M T-bills remains subdued. To me, that suggests the on-chain credit recovery is still in its early stages rather than fully reflected in activity.

More value is accruing to the application layer. Applications now account for roughly 71% of protocol revenue. I think this is an encouraging consequence of the scaling investments made over the past several years. Blockspace has expanded and become cheaper, while the number of useful applications capable of monetizing that infrastructure has grown.

This week’s macro data should help resolve some of the tactical tension. Wednesday brings PCE and GDP. PCE should be relatively well anticipated given the CPI and PPI data already in hand, but the releases are still relevant. Friday’s BLS labor report is likely the more important catalyst for rates and, by extension, crypto.
Bottom Line: I remain constructive and continue to think durable cycle lows are in, but I would not chase indiscriminately here. Breadth is now stretched in both USD and BTC terms, positioning has moved materially more bullish, and rate volatility remains elevated. The setup I would most like to see is a rollover in MOVE that allows BTC to catch a stronger bid and take over more of the leadership from alts. If that happens, I think the broader complex has room for another leg higher near-term.

Portfolios

Tickers in this video: BTC

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